The Next Delusion Is That Technocrats Can Save Europe

Politicians in Greece and Italy failed to do the job. Prime Ministers in both countries went down in flames.

However, it has been a struggle to find anyone to replace them with. Politicians have been bickering over replacements ever since the leaders agreed to resign.

The latest proposal, and one we will likely see in Greece and Italy is “technocracy”, rule by well-respected economic experts, who supposedly will know what to do.

Rise of the Technocrats

The Financial Times discusses the setup in Rise of the Calculating MachineStand by for the rise of the technocrats. Apparently, the answer to the huge problems of the eurozone is the replacement of elected premiers with economic experts – approved officials dropped from European institutions. In Greece, Lucas Papademos, a former vice-president of the European Central Bank, has been pushed hard for the job; in Italy, Mario Monti, another economist and a former EU Commissioner, is much mentioned.

It is as if the crew of the Starship Enterprise had concluded that Captain Jean-Luc Picard is no longer the man for the job and that it is time to send for the Borg. Efficient, calculating machines driving through unpopular measures across the eurozone with the battle cry “resistance is futile” are apparently the order of the day. Faced with a deep crisis, once-proud European nations are essentially preparing to hand over power to Ernst & Young.

This is quite a brilliant comment by Robert Shrimsley of the Financial Times. He makes the point that there is now a possibility of technical government – led by Lucas Papademos in Greece, and Mario Monti in Italy, both former high ranking EU officials. While European officials may find this reassuring, it is not solving what is fundamentally a political problem in those countries. The problem with technocrats is that they have avoided the traditional routes to power.

Shrimsley concludes the best politicians are also experts – they know what is politically possible. We agree with this. It is another one of these quick fix ideas. The EFSF did not work. Leveraging did not work. The next delusion is technical government. The eurozone crisis is a major political crisis at heart. This is why the financial markets are panicking.

Borg Cannot Save Europe

As of 3:15 AM central, various European markets shifted into the Green. S&P 500 futures that were down 6 are now up 9. Yield on the 10-Year Italian bond fell to 71.2 from a high of 7.40.